The third-party 510(k) review process was an emphasis in the most recent user fee negotiations and statutory changes under the FDA Reauthorization Act of 2017 (FDARA). This process has been criticized in the past for being restrictive, ineffective, and not beneficial for applicants.  On January 26, 2018, FDA took its first step towards complying with the new requirements when it issued performance metrics for third-party reviewers (available here).

As discussed in our FDARA summary (available here), the types of devices has been modified. Addressing the restrictive aspect, the most significant change was that devices requiring clinical data are no longer excluded from eligibility for the program.  This change has opened up the possibility of more devices, most notably IVDs, being able to undergo third-party review in the future.

FDA will issue a draft guidance regarding the factors it will use to determine whether a Class I or II device is eligible for third-party review, and the Agency will finalize the guidance within 24 months from issuance of the draft. On the same day the guidance is finalized, FDA will also publish a list of Class I and II devices eligible for third-party review. Until this new list is published, the current list of devices eligible for third-party review is still in effect. In addition, as part of the user fee negotiations, FDA agreed, by the end of 2018, to issue draft guidance regarding criteria for reaccreditation of third party reviewers and the suspension or withdrawal of accreditation of a third party.

Finally, FDA agreed to publish performance metrics regarding third-party reviewers with at least five completed submissions on the web. FDA’s published statistics for FY2018 only, meaning, at most, less than four months worth of data.  There were seven third party reviewers totaling 18 510(k) submissions since October 1, 2017.  Only one of the reviewers had more than five submissions during this timeframe.  This report was issued on January 26, but it is not clear when data collection for the report ceased.  This sparse data set is of little to no use.  Presumably, the next data set will be more meaningful.

The user fee commitment did not specify a timeframe for analysis. It seems odd that FDA selected FY2018.  It provides very limited information because it is such a short time frame.  The utility of the report is, accordingly, limited.  We look forward to FDA completing its other required tasks related to the third party review process.  The process certainly holds potential but has been consistent in one respect – during its two decades, it has not lived up to its expectations or potential.  Perhaps these steps will help change that.

REMINDER: Join Us in April to Learn More about Improving Regulatory Compliance While Minimizing Products Liability! (Sign up here.)

On Monday, January 21 (amid the government shutdown) the Center for Veterinary Medicine of the Food and Drug Administration (CVM) released a draft guidance document addressing Subpart C of the Agency’s regulation titled “Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Food for Animals” (PC rule). Subpart C contains the requirements for facilities to use when developing a written animal food safety plan, conducting a hazard analysis and implementing risk-based preventive controls, if needed.

The draft guidance includes five chapters:

• food safety plan requirements;
• recommendations for conducting a hazard analysis;
• hazards associated with the manufacturing, processing, packing and holding of animal food;
• examples of preventive controls that may be used to significantly minimize or prevent animal food hazards; and
• preventive control management components.

In the federal register notice, CVM identifies them as the first five chapters suggesting that more will be added at a later time.

Similar to what FDA did in the draft guidance for human food preventive controls, CVM prepared a list of different animal food ingredients with specific references to hazards. Although this listing of hazards may seem helpful, it does have disadvantages and seems somewhat inconsistent with the PC rule.  Inspectors can be expected to use the list to determine whether a company has included the listed hazards listed in it’s hazard evaluation.  This appears inconsistent with the requirement that a company must conduct its own analysis based on the scientific literature, personal experience, illness data, etc.  We also note that the list of hazards for various ingredients appears to be based on data going back to 1989 – almost thirty years ago.  Query to what extent thirty year old data are relevant.

The timing of the draft guidance is somewhat unfortunate, because the compliance date for all businesses except those that are small or very small has already passed. FDA published final rules to implement the hazard analysis and risk-based preventive control (PC) provisions for human and animal food on September 17, 2015.  Businesses that are not small or very small businesses under the rule were required to comply with the animal food preventive control provisions as of September 18, 2017.  (Small businesses need to comply by no later than September 17, 2018, and very small businesses need to comply with limited provisions by September 17, 2019.)  FDA announced last year in August that it planned to delay routine preventive controls inspections for large businesses until fall 2018.  However, at that time the Agency made clear that this delay in inspections did not mean that companies should wait with the development of their food safety plan.  In the absence of CVM guidance, those food safety plans may not include or have considered hazards that CVM now has identified.  It remains to be seen how CVM will use its own guidance and whether it will rely on the hazards identified in this draft guidance.

Comments to the draft guidance are due by July 23, 2018.

On January 30, 2018, Dr. Gottlieb of FDA and Secretary Perdue of the USDA announced that they had signed a formal agreement to make the coordination and collaboration between the two agencies more efficient and effective.

The USDA has jurisdiction over most meat, poultry, catfish, and certain egg products whereas FDA has jurisdiction over all other foods such as dairy, seafood, produce and packaged foods. Over the years, the two agencies have worked together and made agreements about information sharing, e.g., a Memorandum of Understanding (MOU) from 1999 concerning information sharing about establishments and operations that are subject to dual jurisdiction and an MOU from 2000 concerning review of ingredients intended for use in products under USDA jurisdiction.

The purpose of the January 30, 2018 formal agreement is to “document and formalize ongoing coordination and collaborative efforts between the USDA and the FDA relative to issues of shared concern.” The agreement specifically calls out the issues of dual-jurisdiction facilities, produce safety, and the regulation of biotechnology products.  As far as dual jurisdiction facilities are concerned, “USDA and FDA share the goals of identifying and potentially reducing the number of establishments subject to the dual regulatory requirements of USDA and FDA, bringing greater clarity and consistency to jurisdictional decisions under USDA and FDA’s respective authorities, including transition period, and decreasing unnecessary regulatory burdens.”  Although this likely comes as good news for such facilities, the agreement seems to be a statement of intent and does not provide details as to how the agencies anticipate accomplishing their goals.

The fact is, regulatory compliance has an impact on products liability.  Yet, the two are seldom considered together.

We aim to change that with a special day and a half program (April 12th and 13th).  Our FDA regulatory firm has teamed up with a renowned medical device liability insurer, MEDMARC Insurance, for a joint program.  It will be held at Virginia Tech’s state-of-the-art conference facility in Arlington, Virginia.

Based upon years of claims experience, MEDMARC has identified the specific FDA regulatory areas that pose the most products liability danger.  We will teach you about improving regulatory compliance in those areas.  MEDMARC will help you understand how to reduce products liability risks.  The combination of these two topics creates a synergy that adds up to powerful risk management.

So give yourself a competitive advantage!  Learn the ounce of prevention that will save you many tens of thousands of dollars every time your FDA inspection goes right or a costly products liability lawsuit is prevented.

All the key program details are in the conference brochure.  You can register here for the conference.

We can’t wait to see you this April to share what we know about mitigating the “other risks” associated with government regulation.

UPDATE:

Changes to the format and dates for the MEDMARC, HPM, VaTech program originally scheduled for this April. 
We will continue to partner with MEDMARC and VaTech to cover topics from the existing April agenda but do so in a series of Webex events that will take place beginning later on this year.  This format change will allow us to reach a larger audience more effectively.

Vape shops in several states have banded together in litigation challenging the constitutionality of FDA’s Deeming Rule (for background information on that regulation, see our prior posting here). Plaintiffs are pursuing the litigation simultaneously in several federal district courts – perhaps with the objective of accelerating the emergence of any potential split in the lower courts that would enhance the chances of obtaining Supreme Court review.

The complaints (see here, here, and here) allege that the Deeming Rule violates the Appointments Clause of Article II because it was issued by an FDA employee who lacked the authority to do so. According to Plaintiffs, “[b]ecause the issuance of a rule is final, because a rule binds the government and the regulated public, and because a rule cannot be easily reversed, only a principal officer of the United States—one who has been nominated by the President and confirmed by the Senate—may exercise such authority” (emphasis added). Plaintiffs acknowledge that the Appointments Clause permits Congress to “vest the appointment of ‘inferior Officers… in the President alone, in the Courts of Law, or in the Heads of Departments’” (emphasis added). However, Plaintiffs argue that, even if an inferior officer can issue a rule such as the deeming regulation, “mere agency employees may not.”

The complaints further allege that the Deeming Rule violates the First Amendment by imposing “significant restrictions on truthful, non-misleading speech” in relation to modified-risk tobacco products. The use of a claim to the effect that a given tobacco product presents a lower risk of harm than a commercially marketed tobacco product must first be approved by FDA pursuant to a showing that the given product “will… significantly reduce harm and the risk of tobacco-related disease to individual tobacco users; and… benefit the health of the population as a whole taking into account both users of tobacco products and persons who do not currently use tobacco products.” Even a “reduced exposure” claim, such as a claim that vaping liquids do not have several carcinogens found in cigarettes, requires FDA’s preapproval. Plaintiffs contend that this “imposes an extraordinary prior restraint” on manufacturers and retailers, in that it’s not enough to show that the speech in question is truthful; in addition, one must show that the “truthful speech will create a net benefit.” The Deeming Rule thereby “impermissibly inverts the constitutionally required burden of proof, under which the government, not the speaker, must demonstrate that a restriction on speech directly and materially advances a valid interest asserted by the government” (emphasis in original).

Given the filing of similar complaints in multiple jurisdictions, we would not be surprised to see the government first try to get the cases consolidated (or at least coordinated). We look forward to seeing how the government eventually addresses Plaintiffs’ allegations.

While we’ve seen variations on the First Amendment argument with some frequency in a number of recent FDA cases, the Appointments Clause argument appears to be an issue of first impression in the FDA space.  Significantly, the theory is not limited to the regulations at issue in the case.  If successful, by logical extension it would implicate thousands of FDA regulations.  The statute of limitations for suits against the government may limit the number of affirmative suits challenging regulations to those issued in the past 6 years (28 USC 2401), but nothing would prevent regulated entities from raising this argument as a defense in an FDA enforcement action based on a “defective” regulation.  That said, it’s not clear how a “win” for the plaintiff in this case would play out.  The Appointments Clause argument, if successful, would seem to only invalidate the issuance of the final rule (not, by way of contrast, the notice and comment process).  Presumably, FDA could, without much difficulty, re-issue any affected final rules in short order—if it wanted to do so.  The administration could only re-issue some regulations, however.   In addition to any filings in this action, we’ll also be watching to see under whose authority FDA’s next final rule is issued.

Last month, the U.S. Court of Appeals for the Eleventh Circuit affirmed prison sentences for Stewart and Michael Parnell, and Mary Wilkerson, formerly of the Peanut Corporation of America (PCA). If you missed our earlier coverage of this historic case (here and here), PCA was responsible for a salmonella outbreak that killed at least nine people and sickened thousands in 2009.

In 2014, Stewart and Michael Parnell were convicted of fraudulently introducing misbranded (and, in Michael’s case, also adulterated) food into interstate commerce, interstate shipment and wire fraud, and conspiring to commit those crimes. Stewart and Mary Wilkerson were convicted of obstruction of justice. Stewart Parnell was sentenced to 28 years in prison followed by three years supervised release, Michael Parnell was sentenced to 20 years in prison followed by three years supervised release, and Mary Wilkerson was sentenced to 5 years in prison followed by two years supervised release. All three Defendants challenged their convictions and sentences on various grounds before the District Court for the Middle District of Georgia, and subsequently appealed to the Eleventh Circuit.

The Eleventh Circuit carefully dispensed with the Defendants’/Appellants’ arguments, indicating that they raised no significant legal issues. The Court’s opinion stated at the outside that it “applied only established law” to the facts, and thus was “written only for the benefit of the parties.”  Nevertheless, the Court went into particular detail about the Defendants’ collective claim that the jury’s verdict was tainted by extrinsic evidence of deaths caused by the salmonella outbreak (this evidence was excluded from the trial). Despite finding that individual jurors had, in fact, learned of the deaths during the trial and discussed those deaths during jury deliberations, the Court concluded, among other things, that (1) the District Court did not clearly err in refusing to credit the testimony of one juror who had expressed a bias towards Mary Wilkerson in the past, and (2) the weight of the evidence against the Defendants was such that the additional knowledge about the deaths did not influence or contribute to the verdict. Defendants’/Appellants’ other evidentiary and procedural arguments also failed.

While it is possible that the Parnells and Wilkerson will petition the U.S. Supreme Court for review, and/or petition the Eleventh Circuit for rehearing or hearing en banc, the chances that either court will grant such petitions are relatively slim. Therefore, this may well be the end of the line for Defendants– they will continue to serve out historic prison sentences. Despite the particularly egregious nature of the case, they may also serve as a cautionary tale.

On January 17, 2018, in an effort to overhaul the regulation of over-the-counter (OTC) monograph drugs, U.S. Senators Johnny Isakson and Bob Casey introduced bipartisan legislation, the Over-the-Counter Drug Safety, Innovation, and Reform Act, S.2315.

As readers of this blog know, the current monograph system, which was implemented in 1972, has received criticism and there have been several efforts to revise the system. Drawbacks include the slow rulemaking process (many OTC drugs are marketed under incomplete monographs), the inability to swiftly and promptly address safety issues, and barriers to innovation (eligibility is largely limited to active ingredients that were marketed before 1972).  In addition, FDA has asserted that it lacks the resources to effectively regulate the OTC monograph products.

The proposed bill is intended to speed up the slow time-consuming regulatory procedures by introducing the administrative order process to replace the current rulemaking procedures. It provides options for manufacturers to request administrative orders and for FDA to initiate administrative orders on its own initiative as well as in response to a citizens’ petition.

The bill would also establish a process for the introduction of new OTC products that are marketed without an approved New Drug Application. Under certain circumstances, such drugs would be subject to two-year exclusivity period.

The bill includes provisions that would provide FDA with the authority to take rapid action in event of safety issues with OTC drugs. It would also require that FDA evaluate the cold and cough monograph with respect to children under the age of six and report annually to Congress on the progress of this evaluation.

Importantly, the bill provides FDA with the authority to collect user fees to help cover much of the costs of the updated regulatory system and provide the necessary resources to evaluate and monitor the market.

Other than the two-year exclusivity provision, the proposed bill is similar to previous proposals. See, e.g., Over-the-Counter Monograph Safety, Innovation, and Reform Act of 2017, authored by representatives Bob Latta (R-OR), Diana DeGette (D-CO), Chairman Burgess, Vice Chairman Brett Guthrie (R-KY), Ranking Member Gene Green (D-TX), and Rep. Debbie Dingell (D-MI).

We will be monitoring further developments.

We have seen the stock language in every guidance document FDA issues claiming its guidance is non-binding:

This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on this topic. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.

or

FDA’s guidance documents, including this guidance, do not establish legally enforceable responsibilities. Instead, guidances describe the Agency’s current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. The use of the word should in Agency guidance means that something is suggested or recommended, but not required.

This language provided little solace to FDA-regulated companies who have seen regulatory consequences result from a failure to comply with FDA’s guidance, for example in Warning Letters citing to guidance documents to support findings of noncompliance.

Until now. Last November, the Trump Administration reaffirmed that “the Administrative Procedure Act requires notice-and-comment rulemaking when purporting to create rights or obligations binding on members of the public or the agency,” and made clear its view that guidance “may not be used as a substitute for rulemaking.” The Department of Justice announced that it will discontinue its own practice of binding private parties without rulemaking, and imposed on itself the requirement that its guidance documents clearly state, among other things, “that compliance with those standards is voluntary and that noncompliance will not, in itself, result in any enforcement action.”

Last week, DOJ Associate Attorney General Rachel Brand announced that it will apply DOJ’s position about its own guidance documents to prohibit DOJ from using its civil enforcement authority to convert other agency guidance documents into binding rules. DOJ issued a memorandum directed at all DOJ civil litigators who bring affirmative civil enforcement (ACE) cases, defined as “civil lawsuits on behalf of the United States to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws.” Of note, DOJ made clear that this policy is “new,” and that it “helps restore” the appropriate role of guidance documents. DOJ now limits the use of guidance documents to certain circumstances – e.g., to prove the requisite mens rea – and “effective immediately,” prevents civil litigators from using “noncompliance with guidance documents as a basis for proving violations of applicable law.” This policy applies to pending and future civil enforcement actions.

DOJ specifically identifies False Claims Act cases as subject to this new policy. For FDA-regulated companies, the impact could be huge. DOJ can no longer base False Claims Act cases on allegations that a company engaged in off-label promotion because it did not meet the requirements set forth in FDA’s Good Reprint Practice Guidance or the draft guidance governing Responses to Unsolicited Requests for Information.   It cannot support a theory that products are unapproved because they do not have the documentation recommended in FDA’s guidance on Deciding When to Submit a New 510(k) for a Change to an Existing Device or establishing Preamendment Status. And it cannot enforce requirements on compounding facilities that have failed to perfectly follow the countless guidance documents FDA has issued in lieu of notice-and-comment rulemaking.

We note that DOJ’s policy cannot stop FDA from continuing to allege violations of its guidance and taking administrative action against companies. Perhaps that will change soon. Nevertheless, the impact of the DOJ policy necessarily will extend to FDA enforcement decisions given DOJ involvement in any ACE cases brought to enforce FDA laws.

On January 24, 2018, FDA and the Federal Trade Commission (FTC) posted joint warning letters to 11 marketers and distributors of opioid cessation products, alleging that those products were unapproved new drugs that violated the Federal Food, Drug, and Cosmetic Act (FDC Act) and made unsubstantiated, deceptive claims in violation of the FTC Act.  Nine of the letters went to dietary supplement marketers, and two to marketers of homeopathic products. The FTC issued four additional warning letters to unidentified marketers of similar products, although it is not clear why those particular marketers (who apparently were not simultaneously targeted by FDA) were permitted to remain anonymous. While it is certainly not unprecedented for the FTC and FDA to issue joint warning letters, the large number of letters bespeaks the importance of this issue to both agencies.

At the end of 2017, an industry coalition of industry trade associations already reminded the industry and consumers that dietary supplement marketers cannot claim that their products treat opioid addiction or withdrawal symptoms.  Under the FDC Act, such claims cause the products to be unapproved drugs. Moreover, FDA has taken the position that opioid addiction is a condition that is not amenable to self-diagnosis or treatment without the supervision of a licensed practitioner and, thus, opioid cessation products cannot be sold over-the-counter. They are regulated as prescription drugs.

As noted above, two of the warning letters, the letter to King Bio, Inc. and the letter to GUNA, Inc., target products labeled as “homeopathic” drugs. Many drug products labeled as homeopathic are manufactured and distributed without FDA approval under enforcement policies set out in the Agency’s Compliance Policy Guide (CPG), which FDA acknowledges in the letters. However, as FDA explains, this does not mean that any product meeting the CPG conditions can be marketed without approval, because “the enforcement policies set forth in the CPG are not unlimited.” Rather, the CPG “delineates those conditions under which homeopathic drugs may ordinarily be marketed in the U.S.” See FDA, Warning Letters to King Bio, Inc. and GUNA, Inc. (Jan. 11, 2018). There are special circumstances that supersede that policy, and the nationwide opioid crisis is one of those special circumstances.

As to the FTC Act violations, the letters note that the claims must be supported by competent and reliable scientific evidence at the time the claims are made. The FTC points to previous FTC enforcement actions challenging claims for the treatment of opiate addiction and withdrawal symptoms FTC v. Sunrise Nutraceuticals, LLC, and FTC v. Catlin Enterprises, Inc., as examples of the possible consequences of making unsupported claims.

FDA and the FTC have requested responses from all the companies within 15 working days.

The final Unique Device Identifier (UDI) Rule was published on September 24, 2013. The last phases of implementation related primarily to Class I and Unclassified devices.  Due to complex issues identified during implementation of the UDI Rule for Class II and III devices, FDA is delaying compliance dates for implantation of the UDI Rule for Class I and Unclassified devices by two years.  Industry was notified of the Agency’s plan to delay last summer via letter, and this enforcement discretion policy has now been formally documented in FDA’s Immediately in Effect Guidance for Industry and FDA Staff, “Unique Device Identification: Policy Regarding Compliance Dates for Class I and Unclassified Devices,” issued on January 16.

The UDI Rule requires a device to have a UDI on its label and packages unless an exception or alternative applies. 21 C.F.R. § 801.20. There are special labeling requirements that apply to stand-alone software regulated as a device. 21 C.F.R. § 801.50). Additionally, the rule requires that certain dates on device labels be in a standard format.  FDA’s UDI system is designed to capture information regarding distributed and used devices and to incorporate this information in an integrated health system, including in the supply chain, registries, and electronic health records.

The UDI requirements have been phased in over the last five years beginning with highest-risk, Class III devices. The final two phases are set to occur on September 24, 2018 and September 24, 2020 with implementation of the below requirements:

Since June 2014, 5% of guidances (8/152) issued by CDRH related to UDI topics. This number of guidances is remarkable given the time it takes to draft and review guidance documents, and the multitude of other important topics CDRH must address. Among these guidances was the November 2017 guidance relating to direct marking of devices with a UDI.  This guidance is noteworthy for those entities required to comply with the Class II marketing requirements taking affect in September 2018.

With the exception of the Class II direct marking requirements, last summer’s letter from FDA to industry extended all of the other upcoming compliance dates by two years. In this letter, FDA promised to issue guidance on articulating its enforcement discretion for the Class I and unclassified device compliance dates.  On January 16, FDA issued such guidance: the immediately-in-effect (for new acronym connoisseurs, IIE) document entitled, “Unique Device Identification: Policy Regarding Compliance Dates for Class I and Unclassified Devices.” The below table shows the original and new compliance dates based on the guidance.

According to the guidance, this extension was granted so that the Agency and industry could identify and address policy and technical challenges to ensure that UDI data are high quality, available, and integrated in standardized and meaningful ways from higher risk devices before focusing on lower risk devices.

In the guidance, FDA distinguishes between class I and unclassified devices manufactured and labeled on or after the original compliance date (September 24, 2018) and finished devices manufactured and labeled prior to the original compliance date established by the FDA. The latter group is excepted from the requirement to bear a UDI for a period of three years after that compliance date. In other words, if your device is manufactured before September 24, 2018, this inventory is afforded a three year exemption out to September 24, 2021. Practically speaking, this means that pre-September 24, 2018 inventory does not need to be reworked to include a UDI on its label or package until September 24, 2021.  If your device is manufactured between September 24, 2018 and September 24, 2020, you lose this rework grace period and are expected to comply with UDI requirements as of the new compliance date (September 24, 2020).  This might prove to be complicated logistically; companies will need to rework inventory built between September 24, 2018 and September 24, 2020 before the new compliance date while not needing to rework pre-September 24, 2018.  FDA offers no rationale for the use of different, misaligned compliance dates.

While this guidance is intended to reduce the burden associated with the UDI rule for finished devices, it appears that misalignment between enforcement dates for devices manufactured before September 24, 2018 and between September 24, 2018 and September 24, 2020 could actually create more burden and confusion. We recommend interested parties comment on the burden that this misalignment will create in two and a half years when the requirements will take effect.

* Senior Medical Device Regulation Expert

FDA issued a draft guidance that addresses public warning and notification of recalls under the agency’s recall regulation at 21 CFR part 7, subpart C (see here and here).  Although the draft guidance extends to recalls of nearly all FDA-regulated products, it is of particular importance to the food sector because it follows on the heels of an HHS OIG report critical about the agency’s oversight of certain food recalls.  In response to that report, Commissioner Gottlieb issued a statement indicating that the agency intended to take “additional policy steps… as part of a broader action plan to improve our oversight of food safety and how we implement the recall process.”  The issuance of the draft guidance appears to be the first of those additional policy steps.

The draft guidance addresses both public warnings (meaning an alert to the public that a recalled product presents a serious health hazard), and public notification (meaning inclusion in the agency’s publicly available weekly Enforcement Report, which lists all recalls regardless of the level of hazard).   The draft guidance discusses the circumstances under which firms should issue public warnings, examples of serious hazards that could warrant a public warning, and the preparation, content, and distribution of such warnings.  The draft guidance notes that the agency could choose to issue its own public warning, and also can “publicly issue information that may address outstanding questions about the nature of the incident and/or the agency’s action.”  A footnote acknowledges that certain information might qualify as confidential commercial information (CCI) and thereby be generally exempt from public disclosure, but points to an FDA regulation that authorizes disclosure “to the extent necessary to effectuate” an “administrative or court enforcement action within [the agency’s] jurisdiction.”

With respect to public notification, the draft guidance states that recalls will be posted in the weekly Enforcement Report only after FDA has determined that the action qualifies as a recall, as defined by the recall regulation.  At that point, the recall will be posted even if it has yet to be classified.

Comments on the draft guidance are due by March 20, 2018.

The title of this blog post should tell you everything you need to know about the proposed appeal regulations announced last week by CDRH (found here). On January 17, CDRH proposed regulations specific to the device appeal process for both 517A decisions as well as non-517A decisions.  The notice announcing the proposed regulations states that they are intended to “provide transparency and clarity for internal and external stakeholders” on the device appeal process.  However, in our view, the proposed regulations add nothing to the existing guidance available to industry and the Agency regarding the device appeal process.

By way of background, as we have previously posted on (here, here, and here), the device appeal process was significantly modified in the Food and Drug Administration Safety and Innovation Act (FDASIA), which created Section 517A of the Federal Food, Drug, and Cosmetic Act (FDC Act). Section 517A defined certain decisions by CDRH (e.g., 510(k) NSE, PMA denial and not-approvable decisions) that were subject to specific timeframes (i.e., appeal must be received by CDRH within 30 days from the decision and date) and bound CDRH to responding to such appeals:

• within 45 days from receipt if an appeal meeting is not requested; or
• within 30 days from an appeal meeting, if requested, and such meeting must be held within 30 days of receipt of the appeal letter.

The Agency has subsequently issued guidance on this topic: “Center for Devices and Radiological Health Appeals Processes” (Appeal Guidance) and “Questions and Answers About 517A” (Q&A Guidance).

It is worth noting that the 517A process for appeals is generally working.  In our experience, the Agency is meeting its statutory timeframes for review of significant decisions.  Indeed, if a deadline for a submission fell on a Saturday or Sunday, CDRH was requiring the submission on Friday, which is more restrictive than the deadlines for litigation.  Until recently, there has been a lack of published information regarding appeal outcomes, which can be difficult for companies to decide if it is worth taking the risk of appeal while wanting to preserve its relationship with its review division.  In a recent U.S. Government Accountability Office (the GAO) report regarding compliance of CDRH’s premarket reviews with the least burdensome standard (available here), it was reported that FDA received 63 517A appeals from 2013 through 2016.  Of these 63, 33 related, at least in part, to least burdensome principles.  Out of these 33, FDA agreed in whole or in part with the appellant (company) in 11 cases (33%) meaning that FDA’s decision was overturned or modified.  These are pretty good odds of getting some relief from an adverse decision where a least burdensome argument is raised, particularly if the company has a good argument.

The 21st Century Cures Act (Cures Act) expanded the list of Agency decisions subject to Section 517A procedures by adding decisions on breakthrough designation requests.  In September 2017, CDRH revised its Q&A Guidance to include such decisions on the list of 517A decisions, resulting in the following list of decisions subject to the 517A requirements:

• 510(k): Not Substantially Equivalent; Substantially Equivalent
• PMA/HDE: Not Approvable; Approvable; Approval; Denial
• Breakthrough Devices: Granting; Denial
• IDE: Disapproval; Approval
• Failure to Reach Agreement on a Protocol under Section 520(g)(7) of the FD&C Act
• “Clinical Hold” Determinations under Section 520(g)(8) of the FD&C Act

The guidance includes the following illustrative list of non-517A decisions:

• 510(k) Requests for Additional Information
• PMA Major Deficiency Letter
• 510(k) and PMA Refuse to Accept Letters
• Postmarket Surveillance Orders under Section 522 of the FD&C Act
• CLIA Waiver Decisions
• Warning Letters
• Response Letter to a Request for Information under Section 513(g) of the FD&C Act

The non-517A decisions are not subject to the 517A timeframes, but according to the Appeal Guidance, in order to be timely an appeal of a non-517A decision should be received by FDA within 60 days of the decision date. The Appeal Guidance set no timeframes for CDRH’s review of non-517A appeals meaning that they could potentially languish for extended periods of time – the issue that led to creation of 517A in the first place.

These lists obviously do not cover all FDA decisions. Most notably, de novo submissions are not included.  Since FDASIA and the Cures Act (the statutes establishing and revising the device appeal process), de novo submissions have become subject to significant user fees (in excess of $90,000).  When CDRH announced its proposed regulations addressing appeals, we hoped FDA would include de novo submissions in the list of 517A decisions, although not required by statute.  Certainly given the new price tag, applicants should have the certainty associated with the appeal process for other significant premarket submissions.  And, given the increased popularity of de novo applications, more companies are interested in that certainty.

The proposed regulations also do not include any Agency procedures (e.g., timing) for review of non-517A decisions. The notice announcing the proposed regulations does, however, discuss at length the naming of non-517A decisions.  Section 517A of the FDC Act pertains to “significant decisions.”  In its earlier guidance, FDA used this same terminology referring to 517A decisions as “significant decisions.”  FDA stated that it did not want to refer to non-517A decisions as “insignificant decisions” (as may be implied by referring to 517A decisions as “significant”) because they are still important even though not expressly identified in Section 517A.  Regardless, however, of what the regulations call these decisions, the lack of Agency procedures for their review highlights their insignificance when it comes to the appeal process and leaves appeals of these decisions at a significant disadvantage as compared to 517A decisions.

Much to our disappointment, the proposed regulations did not address either of these major issues. As indicated at the outset, the proposed regulations simply regurgitate the statutory timeframes and submission types for 517A decisions.  With regard to non-517A decisions, the proposed regulations simply state that appeals must be filed by the applicant within 60 days of the decision.  There are no requirements for the Agency with regard to reviewing or responding to such appeals.  We find the lack of additional clarity and procedures in the proposed guidance somewhat astonishing given that industry and the Agency already understood these procedures and timeframes based on existing guidance.  FDA is accepting comments on the proposed regulations through April 17, 2018.  We strongly recommend those interested in the appeals process comment.  These seemingly arcane procedural elements can help determine the outcome of a submission.

The Department of Justice recently issued a memo to all attorneys in the Commercial Litigation Branch, Fraud Section, and any Assistant U.S. Attorneys handling False Claims Act (FCA) cases, directing those attorneys to seek dismissal of FCA cases under certain circumstances. While the government’s ability to litigate or decline to intervene in a qui tam case is well-known, the government also has the option—by statute—to dismiss a qui tam complaint outright. The FCA (at31 U.S.C. § 3729(c)(2)(A)) provides that:

The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.

This dismissal can take place over the objection of the relator. Some courts grant the government an “unfettered right” to dismiss a qui tam complaint, while others require the government to identify a “valid government purpose.” Noting the burden that even non-intervened cases can bring on the government through discovery, monitoring, and adverse precedent, the memo notes that dismissal “remains an important tool.”

The memo instructs DOJ attorneys to seek dismissal of a qui tam complaint if any of the following seven factors are present:

1. The qui tam complaint is “facially lacking in merit,” either because the legal theory is defective or the factual allegations are frivolous.
2. The qui tam action duplicates a pre-existing government investigation without adding any useful information to the investigation.
3. The qui tam action threatens to interfere with an agency’s “policies or the administration of its programs” and the agency “has recommended dismissal to avoid these effects.” Examples include diverting agency personnel and resources away from an ongoing related project or risk of “significant economic harm” that could cause a “critical supplier” to exit the government program or industry.
4. Dismissal is necessary to protect DOJ’s “litigation prerogatives.”
5. Dismissal is necessary to safeguard classified information, such as in cases involving intelligence agencies or military procurement contracts.
6. The government’s expected costs are likely to exceed any expected gain. Costs to the government includes the “opportunity cost of expending resources on other matters with a higher and/or more certain recovery.”
7. There are problems with the relator’s action frustrating the government’s efforts to conduct a proper investigation, including improper compliance with FCA procedures.

These factors (supported by referenced case law) can be used by the government to establish a basis for dismissal where necessary. The memo notes that this list of factors is not an exhaustive list and that the factors are not “mutually-exclusive.” The memo also instructs DOJ attorneys to “consult closely” with the affected agencies regarding dismissal, and notes that it may be appropriate to dismiss only certain claims or defendants.

The effect of this memo remains to be seen, but it indicates that the government will be less likely to allow relators to pursue certain FCA claims where the government has declined to intervene. And it provides helpful insight to industry as to what factors the government considers in deciding whether to pursue an FCA case.

A week before Christmas, CDRH issued a revised draft of the Replacement Reagent policy. When finalized, the revised draft guidance will replace the 2003 final guidance. According to FDA, the revised guidance “is intended to update and provide clarity on” the existing policy. FDA has long commented that the 2003 guidance was overused and often misunderstood. As discussed below, the draft guidance that will replace the existing Replacement Reagent policy takes a more limited view of the replacement reagent policy. This means that fewer reagent instrument combinations will be able to enter the market via this approach. It is somewhat ironic then that the guidance states, in its introduction, that this revised policy “is important for public health as it promotes more timely availability of a wider array of clinical laboratory tests for patient benefit.” In fact, it appears likely to have the opposite effect.

At a high-level the policy is unchanged, 510(k)-cleared reagents can be used on certain additional instruments that were not included in the reagent 510(k) without the need for a new 510(k).  Specifically, the additional instruments can include:

1. 510(k)-cleared instruments that were not included in the reagents 510(k) clearance; and
2. instruments in the same instrument family as the instruments on which the reagents were validated in their 510(k).

The guidance does not apply to certain assays, including Class III devices, point-of-care devices, and prescription home use devices, among others.  The new policy notes that certain assay-specific guidances exclude application of the Replacement Reagent policy, for example, the clinical multiplex test system guidance.  The revised draft guidance also excludes “modifications other than application of a cleared assay to a new instrument.”  This exclusion is modified from the 2003 policy, which stated “changes in the intended use of a cleared product.”  The exclusion in the proposed policy is significantly broader and could exclude minor modifications that would not otherwise require a 510(k) clearance (e.g., a minor change to the 510(k) cleared reagents that is unrelated to the application of the reagents to the new instrument platform).  Thus, at the outset, the policy appears to be more limited in scope than the original guidance meaning that fewer assays will be eligible.

In addition, the revised draft guidance notes that the policy has been historically applied to traditional laboratory automated chemistry systems and immunoassays.  The guidance indicates that manufacturers can contact FDA regarding the policy’s applicability to “evolving technology” (e.g., via the pre-sub process).  It is unclear, however, how FDA defines an “evolving technology.”  Is it any technology other than traditional laboratory automated chemistry systems and immunoassays?  There are many well-known technologies in this category, for example, liquid chromatography and mass spectrometry.  Or something truly new and not yet known?  In short, the revised draft guidance may apply to a narrower subset of the universe of instruments than its erstwhile predecessor.  This exclusion for “evolving technology” appears to even further limit the scope of the guidance.

While the broad objective of the draft policy is fundamentally the same as the 2003 version, the revised draft does include a new recommendation that the manufacturer seeking to apply the policy perform a risk assessment of the change.  The risk assessment is intended to identify the risks associated with applying the 510(k)-cleared reagents to a new instrument.  These risks and associated verification and validation results will be used to determine whether the proposed change fits within the Replacement Reagent policy or if a new 510(k) is required.  This approach is consistent with the new, final guidance “Deciding When to Submit a 510(k) for a Change to an Existing Device,” but adds a layer not found in the current policy.

The revised draft policy also provides specific suggested tests to be performed as part of the verification and validation of the cleared assay on a new instrument.  The guidance also notes, “if an updated, FDA-recognized standard or guidance has been published since the time of assay clearance, it is preferable that the manufacturer follow this; however, it is also acceptable to use the same standard or guidance that was followed to support the cleared 510(k).”  This could be a dangerous suggestion – what if an assay does not pass the updated standard but does pass the original standard?  Will the policy still apply?  It is unclear and could become a problem for companies seeking to utilize this policy for their assays.

For the Instrument Family Policy to apply, an instrument must be in the same family as the cleared instrument, including sharing a common design history file.  The revised draft guidance makes clear that instruments in the same family are essentially just iterations of the same original instrument. The guidance “encourages” communication between the reagent and instrument manufacturers, when they are not the same company.  However, without a formal relationship, the reagent manufacturer may have trouble knowing if one instrument is in the same family as another.  We anticipate that, particularly for assay-only manufacturers, that this will further limit the ability for companies to utilize this policy.

The new draft guidance replaces the flowcharts in the 2003 guidance with numerous examples.  The guidance also provides additional recommendations as to how to present information in a CLIA categorization request when an assay and instrument combination enter the market through this policy.  While the guidance does provide some additional useful information, the scopes appears to be so much more limited and the requirements more burdensome now that its utility will yet to be seen.

As stated in our blogpost discussing FDA’s announcement of 2018 Compounding Policy Priorities (here). FDA also released its Final Guidance on Compounding “essentially copies” of commercially available drugs.  This long-anticipated guidance discusses how FDA intends to determine whether a compounded drug is essentially a copy of a commercially available drug product.  We discuss each Final Guidance separately below.

Essentially Copies Under Section 503A

FDA’s Final Guidance for traditional, Section 503A pharmacy compounders does not read that differently from the draft guidance, which we blogged about here.

The Final Guidance does, however, contain a handy flow chart (similar to the chart FDA included in the 503B draft guidance) that enables the reader easily to review FDA’s criteria for what it considers is essentially a copy and make a determination whether a compounded product meets the guidance’s criteria. FDA states in a footnote that it also considering “the applicability” of the guidance to hospitals and health systems, and will address that issue in a separate guidance or rulemaking, thus telegraphing that the Agency will potentially adopt a different “essentially copies” analysis for compounding for those entities.

The Final Guidance does not change the definition of what it considers a “commercially available drug product” (i.e., considering whether a product is no longer commercially marketed (excluding for reasons of safety or effectiveness) and Section 506E shortage drugs).  It also does not change what it considers “essentially a copy” of a commercially available drug product, using the same test set forth in the draft guidance:

• the compounded drug product has the same active pharmaceutical ingredient (API);
• the APIs have the “same, similar or easily substitutable strength”; and
• the products can be used by the same “route of administration.”

If the compounded formulation meets ALL three of these criteria, then the compounded product is “essentially a copy” of a commercially available product and can only be compounded in small amounts as described in the Final Guidance.  Concerning similar dosage strengths, and despite several comments addressing the issue, FDA left in the Final Guidance its “10% statement:” “FDA generally intends to consider two drugs to have a similar dosage strength if the dosage strength of the compounded drug product is within 10% of the dosage strength of the commercially available drug product.”  And, notably, if the commercially available drug has to be “split” and the tablet is not suitable for splitting, FDA would not consider the compound made to the prescribed dosage strength to be “easily substitutable.”  FDA also maintained its limitations in the Final Guidance concerning compounds that have the same characteristics as two or more commercially available drug products, notwithstanding some industry confusion concerning permissible conduct when compounding multiple ingredients in the same, similar or easily substitutable strength that are also separately commercially available.  The Guidance also again makes clear that price alone is not sufficient to render a product outside the essentially copies prohibition.

The Final Guidance also does not substantively differ from the draft concerning the required “statement of significant difference” when copying commercially available drug products. With respect to whether a compounder is compounding “regularly or in inordinate amounts,” FDA’s final position is also consistent with statements in the draft guidance, including considering permissible compounding “four or fewer” prescriptions of essentially copies in a calendar month.  FDA does not consider any prescription that notes a “significant difference” to be essentially a copy; thus those prescriptions would not be counted in the four-prescription limit.  FDA recommends that pharmacies maintain records documenting statements of significant difference for a period of at least three years.

Essentially Copies Under Section 503B

Notwithstanding dozens of comments from industry, like the Section 503A essentially copies Final Guidance, the Section 503B Final Guidance is not substantially different from the draft guidance that FDA released in 2017, and blogged about here.   FDA adds that it does not intend to take enforcement action against an outsourcing facility for failing to compound in accordance with section 503B(a)(5) if it fills orders for a compounded drug that is essentially a copy of an approved drug that has been discontinued and is no longer marketed.  FDA does not clarify whether these compounds would be limited to those drugs made with substances on FDA’s bulks list 1 (or the bulks list FDA intends to finalize through regulations), however.

FDA is considering the same factors to determine whether the compounded product is identical or nearly identical to the approved drug where ALL of the following are the same:

• active ingredients;
• route of administration;
• dosage form;
• dosage strength; and
• excipients.

Unlike the draft, the Final Guidance adds the following concerning “route of administration:” If the approved drug can be used (regardless of how it is labeled) by the same route of administration prescribed for the compounded drug, FDA intends to treat the “compounded drug as though it has the same route of administration for purposes of this analysis.  For example, if the approved drug is an injectable drug sold in a vial that is labeled for intra-muscular use, but this drug can also be drawn from the vial by a smaller needle for subcutaneous administration, a compounded drug product sold in a similar vial and prescribed for sub-cutaneous use would be considered to have the same route of administration under this analysis.”  In contrast to “essentially copies” under Section 503A (where FDA does not define “identical” or “nearly identical”), if a compounded drug product is “identical” or “nearly identical” to the commercially available drug product, the fact that a prescriber makes a determination of significant or clinical difference is of no matter – such a product may not be compounded under Section 503B unless there is a drug shortage. Like Section 503A, however, FDA does include a footnote that seemingly permits compounding drug products have been discontinued (or never marketed) for reasons other than safety or effectiveness.

Other provisions of the Section 503B “essentially copies” guidance have not changed between the draft and the Final Guidance, other than FDA’s recommendation that a facility keep records demonstrating the clinical difference determination for a period of at least three years. Like in the draft guidance, the Section 503B Appendices setting forth how FDA intends to determine whether a compounded drug product is essentially a copy of a commercially available drug product under Section 503B are attached here.